In the crisis of life, buyers now have to pay after buying

Consumers are increasingly turning to pay-per-view (BNPL) products to manage their finances in the face of increasing livelihood crises, according to new research.

The BNPL products offered by companies like Klarna, Clearpay and LayBuy, which allow buyers to dispense payments within a certain period of time, have grown in popularity during the epidemic.

A survey of British buyers found that 41 per cent opted for BNPL in the absence of interest charges, 22 per cent opted for products due to improved cash flow management and 28 per cent used it to support their budgets, according to a financial study by service consultancy firm RFI.

Kate Wilson, head of consumer credit at RFI Global, says buyers are choosing BNPL to avoid the cost of traditional debt amid rising inflation.

“Most of the BNPL users are millennials who want to manage their money more efficiently and avoid debt,” he said.

“The BNPL’s general credit model provides a convenient way for them to spread the cost of certain purchases over a period of weeks or months in equal payments, helping to budget without resorting to debt, overdrawing or spending on credit cards. They can buy what they want, when they want, and take full advantage of promotional or sales items. “

But the study comes amid growing concerns about the use of BNPL products to plunge consumers into debt.

A recent YouGov survey commissioned by debt charity StepChange suggested that one-third of BNPL users have two or more outstanding debts, while a study by Citizens Advice last summer found that 10 percent of BNPL buyers chased debt collectors.

The government is preparing to close the sector with regulations expected later this year.

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